Las Vegas Sun

October 1, 2023

real estate:

Nevada’s foreclosure rate tops nation once again

Updated Thursday, Feb. 12, 2009 | 6:16 p.m.

Las Vegas Realtor statistics

A second report issued this week on foreclosure trends shows foreclosure filings declined nationwide and in Nevada last month, but offered little optimism for a quick turnaround in the housing market.

Nevada again had the highest foreclosure rate in the nation in January and among the nation’s metro areas, Las Vegas was No. 2 in the report issued by RealtyTrac of Irvine, Calif.

RealtyTrac’s January 2009 U.S. Foreclosure Market Report shows foreclosure filings — default notices, auction sale notices and bank repossessions — were reported on 274,399 U.S. properties during the month, a 10 percent decrease from December but up 18 percent from January 2008.

“The extensive foreclosure efforts on the part of lenders and government agencies appear to have impacted the January numbers — particularly the Fannie Mae and Freddie Mac moratorium on all foreclosure sales that was extended through the end of January along with Florida’s voluntary 45-day freeze on all new foreclosure actions and scheduling of foreclosure sales that was announced at the beginning of December,” James Saccacio, chief executive officer of RealtyTrac, said in a statement.

He said completed foreclosure sales were down 15 percent nationwide from December. said Wednesday in its own report that its analysis of the January numbers indicates the real estate market is recovering. But RealtyTrac doesn’t see it that way.

Foreclosures will increase again and probably peak this year, and it may be 2011 before all the foreclosures in the market and in the pipeline are dealt with, said Rick Sharga, senior vice president of RealtyTrac.

He said adjustable-rate mortgages continue to adjust to higher rates, making it more difficult for homeowners to make payments; and rising unemployment is adding to the stockpile of foreclosed homes.

The true indicator of a turnaround in the real estate market, he said, is when prices stop falling.

"As long as you see things like sales are up 6 percent and pricing is down 15 percent, that suggests investors are buying the most distressed properties,’’ he said.

A turnaround will be indicated by two things, he said: "When you see sales activity increase without the coincidental drop in pricing and when you see the foreclosures are slowing down absent any government or industry moratorium.’’

Nevada legislators are considering measures to reduce foreclosures in the state. Assembly Speaker Barbara Buckley, for instance, has a bill requiring lenders to offer to negotiate mortgages with borrowers who face foreclosure.

But Sharga said efforts by government and industry to stem the tide of foreclosures nationwide and in individual states have only delayed the day of reckoning for most delinquent homeowners, many of whom are "under water.’" That means they owe more on their home than the property is worth and they have little to lose by walking away from the mortgage.

"What we’ve seen with moratorium or delay tactics is that when the delay is over, foreclosures jump back to the number before the delays,’’ he said. "What they do is delay the inevitable for most homeowners. They extend the housing downturn.’’

RealtyTrac said Nevada foreclosure activity in January decreased 4 percent from the previous month, but the state continued to register the nation’s No. 1 foreclosure rate, with one in every 76 housing units receiving a foreclosure filing during the month. Foreclosure filings were reported on 14,444 Nevada properties in January, up 137 percent from January 2008.

California posted the nation’s second-highest state foreclosure rate in January, with one in every 173 housing units receiving a foreclosure filing during the month, and Arizona posted the nation’s third-highest state foreclosure rate, with one in every 182 housing units receiving a foreclosure filing during the month.

California cities accounted for six of the top 10 metro foreclosure rates in January among metro areas with a population of 200,000 or more. Merced, Calif., (between Modesto and Fresno), posted the top metro foreclosure rate, with one in every 59 housing units receiving a foreclosure filing during the month.

Other California metro areas with foreclosure rates among the top 10: Riverside-San Bernardino at No. 4 with one in every 81 housing units receiving a foreclosure filing; Modesto at No. 5 with one in every 84 housing units receiving a foreclosure filing; Stockton at No. 6 with one in every 86 housing units receiving a foreclosure filing; Vallejo-Fairfield at No. 7 with one in every 100 housing units receiving a foreclosure filing; and Bakersfield at No. 8 with one in every 120 housing units receiving a foreclosure filing.

One in every 63 housing units received a foreclosure filing in the Las Vegas metro area. The Reno-Sparks metro area posted the 10th highest metro foreclosure rate, with one in every 128 housing units receiving a foreclosure filing.

Separately, the National Association of Realtors today reported that home prices continued to fall in most U.S. metro areas in the fourth quarter of 2008.

Nationwide, the median sales price plunged from $200,400 in the third quarter to $180,100 in the fourth quarter.

The median price fell even more in the Las Vegas area, from $211,600 to $181,700, the Realtors said.

In the fourth quarter, 134 out of 153 metropolitan statistical areas showed declines in median existing single-family home prices from the same period in 2007, pulled down by active sales at the lower end that were driven by foreclosures, the NAR said.

Distressed sales -- foreclosures and short sales -- accounted for 45 percent of transactions in the fourth quarter, dragging down the national median existing single-family price to $180,100, 12.4 percent below the fourth quarter of 2007.

Lawrence Yun, NAR chief economist, said the market is clearly depressed from job losses and consumer concerns about the economy.

"Assuming housing provisions in the economic stimulus package are quickly enacted and provide enough encouragement for home buyers, we could see a quick lift in home sales for the critical spring home-buying season," he said in a statement. "If that occurs, we could see home prices begin to stabilize in many metro areas later this year as supply and demand begin to return to balance, which would greatly benefit the overall economy."

Steve Green can be reached at [email protected] or 990-7714.

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